Dubious Entanglements

continued  In the 1990s, Laffer invested in a pizza chain named Mountain Mike's. He got in through Blaine Quick of Rancho Santa Fe. Another investor was former San Diegan Richard Silberman, a friend of Quick's. In 1990, Silberman had been convicted of helping launder $300,000 from a government agent posing as a front for Colombian drug traffickers. After getting out of prison in 1993, Silberman invested and also put two children of Susan Golding -- his former spouse and then San Diego mayor -- into the deal. Other investors included Seth Flam and Dr. Sol Lizerbram of FPA Medical Management, a onetime Wall Street darling that later plunged ingloriously into bankruptcy. Mountain Mike's was sold to a company named Jreck and then into another fast-food chain with acute dyspepsia named Ultimate Franchise Systems. "Jreck was a wreck," laughed Laffer at the time.

On March 4, 2002, Forbes magazine ran a lengthy investigative story with this opening paragraph: "How do respectable names like Deloitte & Touche and Arthur Laffer get tangled up with a seedy outfit like Casmyn Corp.?" The company mined for gold in such places as Zambia and Zimbabwe. Deloitte was the accounting firm. Laffer was on the board, along with the late Baron Edmund de Rothschild. The baron "was the one who told me these guys were great," says Laffer. "He had a huge estate outside of London."

However, as Forbes related, the company collapsed in scandal, and the chief executive officer vamoosed. "I got out. I complained that it was not managed in a proper fashion," says Laffer.

"I am involved in tons of things [including] investing in emerging companies," says Laffer. "Some have problems." Indeed. And those problems have not helped Laffer's reputation.